Court rules insurer not directly liable to third party

AN INSURER is not liable for any injury caused to a third party by any negligent driving of a person when driving a vehicle with the owner’s consent but without being a named driver on their policy, the Supreme Court has ruled.

The insurance firm’s liability is to the insured and is not a liability owed directly to the injured party, the five-judge court said.

It was ruling on a legal point raised by a man arising from his District Court conviction for driving his father’s car without insurance. Keith Donnelly was convicted in February 2008 of driving his father Eugene Donnelly’s car without cover on January 27th, 2007, at Fairgreen, Carlow.

The car was insured under a policy issued by AXA Insurance Ltd to Eugene Donnelly with himself and his wife as named drivers. Keith Donnelly was not named. When stopped by a garda and asked for his insurance, he opted to produce it at Athy Garda station, and there produced his father’s insurance certificate.

He later appealed his conviction to the Circuit Court, which referred legal issues, including a possible point of EU law, for determination by the Supreme Court.

The case involved provisions of the Road Traffic Act 1961, particularly section 56.1, which provides a person “shall not use a mechanically propelled vehicle in a public place unless either a vehicle insurer, a vehicle guarantor or an exempted person would be liable for injury caused by the negligent use of the vehicle at that time”.

The issues raised centred on the interpretation of the words “vehicle insurer” in section 56.1. The essential issue was whether the reference to vehicle insurer included a case such as that of Keith Donnelly, where an approved policy of insurance was in place but it did not cover Keith Donnelly’s driving.

The Supreme Court ruled Axa would not have been liable if Keith Donnelly caused personal injury or damage to another person by negligent driving on the date in question, January 27th, 2007.

Mr Justice Nial Fennelly noted several provisions in section 56 have been amended by statutory instrument so as to give effect to various European directives resulting in “a somewhat unsatisfactory patchwork of provisions, some of them clearly outdated”.

He rejected arguments section 56.1 was ambiguous. The duty of the insurer was to meet the liability of the insured and that liability was not owed directly to the injured party, he said.

Given that finding, the judge said the court was not required to address other issues raised in the case related to interpretation of various EU insurance directives.